Leaving Home: Will Medicaid Exempt Your Senior Parent's House?

Under the current Medicaid laws, even after you enter a nursing home, your personal residence will not be counted as part of your assets, in determining if you are eligible for Medicaid coverage of your nursing home costs.

However, if you are single and if your equity interest in your home exceeds $500,000, then your house will be counted, almost certainly causing you to be disqualified from Medicaid coverage.

If you are married and your spouse continues to reside in the home, then it will be exempt no matter what its value. Also, if you have a dependent or disabled child living in the home, again there is no value limitation.

But what if you are single and you move from your home to an assisted living facility, and later your condition requires you to move into a nursing home? Will Medicaid pay for that nursing home? Will your former home continue to be exempt?

Unfortunately, no. Once you moved out of your home of many years, it was no longer your "principal residence," so it lost its exemption. Now, some states will continue the exemption for up to six months, so long as you maintain that you continued to have the "intent to return" to your former home, but they are in the minority.

Indeed, even if you moved directly from your home to a nursing home (and for these purposes a short transitional stay in a hospital does not count), your home may not be exempt unless you continue to have the "intent to return" to your former home. Under federal law, if you cannot express this intent yourself, your spouse or dependent relative may express it for you. That being said, it is always a better idea to write down your intent to return home as soon as possible after you enter a nursing home, so that should it become necessary to document your intent, there will be written proof.

So the moral of the story is, if you move from your home to an apartment, independent living or assisted living facility, you probably should consider selling your former principal residence and dealing with the proceeds in a manner that will best provide for your care long into the future. Part of your plan may be to prepare for the eventuality of moving into a nursing home. If so, it is important to contact an experienced elder law attorney as soon as possible, so that there will be ample time to put a good plan into place, make gifts if advisable, etc. The sooner you plan, the more of your assets you will be able to keep.

 Comments 1 to 7 of 7 

Alabama Medicaid law states that unless a spouse is residing in the home, the home is considered an asset and will therefore, disqualify for medicaid.

I am my Mother's POA and in NC I had to sign a form stating that my Mom has all intentions of returning home even though she has dementia. I had to request DSS let me sign that form. The state now has a lien on my mother's house. She has been on medicaid since October 2012

my mom resides in California and is on medi medi and is in a skilled nursing home. Her monthly SSI ends the 30th of this month, but she may be able to return to her own home (with assistance) in a month or two. Without her monthly income she will lose her home she is renting. I saw somewhere a form (intent to return home) which funds payment for her rent up to six months. Does anyone know where I can find/file that form and how it works?

Seems to me that if an elderly parent has to go to assisted living/nursing home that all assets should go toward that care. My parents live on SS only and when the time comes when they can no longer live at home, their home certainly will be sold to go toward their care. I hear so many people talk about how they can keep Medicaid from taking their home or assets. Some people plan and sacrifice for their future and future care, if needed. Others do not and let the Government, i.e. (taxpayers) pay for their care. When I hear people trying to put their houses in their children's names, etc, I want to tell them that I don't want to pay for their care especially if they have resources! I really don't understand this. Therefore, it is fair that unless one spouse still needs to reside in the residence, then that residence needs to go toward their care.

My Father-in-Law put their home into his sons name in 2010 and when we had to start applying for Medicaid for my Mother-in-Law (who has Alzheimers), in 2012, there was an article that advised that the home is exempt from being counted as an asset because their son LIVES there and the house is in his name in Trust, meaning that Mom & Dad are still the owners but once they pass, the house is his. Dad passed away in 2012 and Medicaid definitely does NOT consider the house an asset for Mom. This is in New York State. However, they do expect her to live on $790.00 a month as income, so anything over and above that that she receives in income, we have to pay to Medicaid...which equals out to $504.00 a month, AFTER we pay for her AARP and her Medicare Part A.... :( We do get to deduct any medical expenses but she is not on any medications so we are lucky to spend $100.00 a month on Depends & Poise Pads and things like that. It makes me sick that we have to "pay to have Medicaid" but we will do what we have to to make sure that she gets the care she needs and deserves in order to stay living IN HER HOME!

Why should Medicaid exempt my parent's house?

Kashi - Medicaid usually exempts the home if the Medicaid recipient has an "intent to return" to their home. Most states take that approach. There are a few states that don't or limit the home exemption for a set period of time. Medicaid is adminstered by each state under federal guidelines so how a state views property & homeowner rights makes a big difference. But if they keep the home, it will change from a Medicaid exempt asset to a non-exempt asset upon their death and there will be a MERP - Medicaid estate recovery claim or lien on the property to be dealt with by the executor of their estate in probate. In theory, Medicaid cannot force your parents to sell the home. But what does happen, is since Medicaid requires that all of a NH resident to have their income (less their small $ 35 - 90 personal needs allowance per month) be their co-pay to the NH, that there is none of their $ to maintain the home. Since there is no $, the house gets sold and all the proceeds used to pay for their care. But if family wants to - for whatever reason - keep the parents house, they can but they have to pay for everything (taxes, insurance, utilties, repairs, etc) on the home and those costs may or may not be reimbursed from the estate after death. If there is a mortgage, it probably is totally unfeasible to do this. If reverse mortgage, then unless there is a spouse continuing to live in the home, the RM is due in full upon the move to the NH. So house gets sold in these situations. But really they cannot be forced to sell but you or other family have to come up with the funds & have the sense of humor to pay for all expenses for the possibly many, many years the elder is alive.

 Comments 1 to 7 of 7 
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